Don’t be victimized by an illegal home builder
Buying a home is likely the largest financial transaction you will ever make. That's why, when buying a new home, it's important to make sure it's built by a reputable company, one that's registered with Tarion, the administrator of Ontario's new home warranty program.
Most licensed builders in Ontario take pride in delivering quality homes and exceptional service to their homeowners.
They will proudly display their status as a licensed builder because it means that they are a part of a regulated profession. They are required to follow strict customer service standards and are part of one of Canada's most comprehensive new home warranty programs.
Tarion's annual new home owner surveys confirm that the majority of new homeowners feel their builders met their expectations.
However, not all builders in Ontario are registered with Tarion, even though they are required by law to do so.
Illegal builders present a clear risk to consumers: if they are operating without a licence they are likely not enrolling their client's new home with Tarion or advising homeowners of their rights and responsibilities under the new home warranty. This protection could be worth up to $300,000 to the homeowner.
When Tarion is asked to investigate illegally built homes, they often find many components that haven't been built to meet the requirements of the Ontario Building Code.
Illegal builders may also be less likely to follow other laws and statutes like Ontario's Workplace Safety and Insurance Act and the Occupational Health and Safety Act, which could expose new home buyers to potential liability.
Illegal building can be difficult to spot, but illegal builders can sometimes offer some clues about their status when you talk to them about purchasing a new home.
If a builder claims that they have a special exemption from being licensed or that you don't need a Tarion warranty because they offer their own, don't be fooled. Being licensed and providing the full warranty, backstopped by Tarion, is the law.
A second red flag is a builder telling you they can enroll the home in the warranty program, but it would cost you around $10,000. In fact, home enrollment fees for the warranty program range from $385 - $1500, depending on the price of the new home. This cost is paid by the builder and is only recovered from you if you agree.
To protect yourself from purchasing from an illegal builder, do some research before entering into any type of purchase agreement or contract to build a home.
Visit Tarion's Ontario Builder Directory at www.tarion.com to see if your builder is licensed to build in the province or call Tarion at 1-877-9TARION. You can also call your local home builders' association to ask if the builder you're considering working with is a member in good standing.